Madrid markets fall on return of the centre-right

 

Madrid

There was no time for Spain's centre-right Partido Popular [PP] to celebrate its general election victory yesterday as markets fell on fears that the party did not have a coherent plan to tackle the country's burgeoning deficit.

Madrid's main stock market fell by 2 per cent in early trading, while 10-year bond yields again approached the worrying 7 per cent level – at which other eurozone countries have needed a bailout. The PP leader Mariano Rajoy, who is set to become the new prime minister, has promised to introduce austerity measures, but has so far provided little detail.

The markets were not assuaged by Mr Rajoy's victory speech, in which he described the Spanish economy as being in "its most delicate situation in 30 years". Soraya Saenz de Santamaría, the PP parliamentary spokeswoman, called for the handover of power from the Socialist Party [PSOE], in power for the past seven years, to be speeded up.

To the dismay of some PP officials, and the markets, Spain's new parliament is not due to meet until 13 December. Mr Rajoy will only be sworn in as prime minister about 10 days later. "There are extraordinary problems which might demand that the interim period between one government and the next did not exist," Ms Saenz de Santamaría said. "The markets do not wait for ministers to be appointed or for parliamentary [chambers] to be formed," added PP president Miguel Arias Cañete.

The Socialists rejected the calls for their speedy departure, however, with the outgoing premier Jose Luis Rodriguez Zapatero saying: "The transfer of power and the timing of it is determined by law." He also pledged to collaborate closely with Mr Rajoy for the month he remains in charge of a caretaker government, but failed to reveal exactly how the two political rivals might ease pressure on Spain's beleaguered economy from the markets.

Spain, the fourth largest eurozone economy, is labouring under a huge public debt pile, and with unemployment nearing 20 per cent, the government's tax revenues are muted. The markets will also be concerned about who will be selected for the crucial finance ministry portfolio, which Mr Rajoy yesterday hinted might be filled by someone from outside the PP.

The uncertainty surrounding who will fill any of the posts in Mr Rajoy's future government is such that the pro-PP newspaper El Mundo held a survey among its readers yesterday entitled "Who will be minister?" alongside photos of 24 possible candidates. Alberto Ruiz-Gallardon, the mayor of Madrid, and Federico Trillo, a former defence minister under former PP premier Jose María Aznar are said to be frontrunners, but Mr Rajoy, well known for his discrete, non-committal style, has yet to indicate any preference.

Defending his record, Mr Zapatero, whose popularity plummeted when he enacted severe austerity measures in 2010, claimed the ferocity of the recession and tension in the markets were to blame for the collapse of PSOE support, concluding, "The whole of Spain knew we had the wind set dead against us".

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
News
ebooksNow available in paperback
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Business Development Executive - OTE £40,000

£25000 - £40000 per annum: Recruitment Genius: An expanding business based in ...

Recruitment Genius: Field Sales - Business Broker - Scotland

£35000 - £40000 per annum: Recruitment Genius: As an award winning and leading...

Recruitment Genius: Field Sales - Business Broker - North East Region

£35000 - £40000 per annum: Recruitment Genius: As an award winning and leading...

Recruitment Genius: Field Sales - Business Broker - South West Region

£35000 - £40000 per annum: Recruitment Genius: As an award winning and leading...

Day In a Page

Homeless Veterans appeal: 'You look for someone who's an inspiration and try to be like them'

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Could cannabis oil reverse the effects of cancer?

Could cannabis oil reverse effects of cancer?

As a film following six patients receiving the controversial treatment is released, Kate Hilpern uncovers a very slippery issue
The Interview movie review: You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here

The Interview movie review

You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here
Serial mania has propelled podcasts into the cultural mainstream

How podcasts became mainstream

People have consumed gripping armchair investigation Serial with a relish typically reserved for box-set binges
Jesus Christ has become an unlikely pin-up for hipster marketing companies

Jesus Christ has become an unlikely pin-up

Kevin Lee Light, aka "Jesus", is the newest client of creative agency Mother while rival agency Anomaly has launched Sexy Jesus, depicting the Messiah in a series of Athena-style poses
Rosetta space mission voted most important scientific breakthrough of 2014

A memorable year for science – if not for mice

The most important scientific breakthroughs of 2014
Christmas cocktails to make you merry: From eggnog to Brown Betty and Rum Bumpo

Christmas cocktails to make you merry

Mulled wine is an essential seasonal treat. But now drinkers are rediscovering other traditional festive tipples. Angela Clutton raises a glass to Christmas cocktails
5 best activity trackers

Fitness technology: 5 best activity trackers

Up the ante in your regimen and change the habits of a lifetime with this wearable tech
Paul Scholes column: It's a little-known fact, but I have played one of the seven dwarves

Paul Scholes column

It's a little-known fact, but I have played one of the seven dwarves
Fifa's travelling circus once again steals limelight from real stars

Fifa's travelling circus once again steals limelight from real stars

Club World Cup kicked into the long grass by the continued farce surrounding Blatter, Garcia, Russia and Qatar
Frank Warren column: 2014 – boxing is back and winning new fans

Frank Warren: Boxing is back and winning new fans

2014 proves it's now one of sport's biggest hitters again
Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

Jeb Bush vs Hillary Clinton

Karen Tumulty explores the power dynamics of the two first families
Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

Stockholm is rivalling Silicon Valley

The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

Crucified Santa: Urban myth refuses to die

The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture
Jennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress

The Boy in the Dress: On set with the stars

Walliams' story about a boy who goes to school in a dress will be shown this Christmas